On Friday, December 1, 2023, the U.S. Department of Energy (DOE) and U.S. Department of Treasury concurrently released two long-anticipated Notices of Proposed Rulemakings regarding the “Foreign Entity of Concern” (FEOC) exclusion—a key provision relevant to electric (EVs) and other clean vehicle tax credits under the Inflation Reduction Act of 2022 (IRA) and DOE grants under the Infrastructure Investment and Jobs Act of 2021 (IIJA). The same day, the Internal Revenue Service (IRS) also issued guidance setting forth procedures for automobile OEMs to certify vehicles as qualifying for clean vehicle tax credits. The FEOC definition provided in DOE’s guidance is similar to, but different from, the Department of Commerce’s proposed FEOC definition implementing the CHIPS and Science Act, which it issued in October, 2023 (Hogan Lovells Summary). This FEOC definition is applied in two areas:
